Social Security Email Regarding Military Service

Sometimes you have to be cautious about what you read online. Sometimes a letter or memo will travel via email from person to person without anyone really knowing how it originated. If you do a little homework and visit the source website, you can alleviate any erroneous information that might be going around.

In this case, I would like to share a message in regards to Social Security benefits that was forwarded to me by several concerned people. The following text is the message that has been floating around in cyberspace. I haven’t changed any of the original text, so do your best to read through the poorly written text, but I will add my “two cents” after the message:

This is something to put in your files for when you apply for Social Security down the road. It is NOT just for retirees, BUT anyone who has served on active duty between January 1957 to December 31, 2001.

FYI – this benefit is not automatic, you must ask for it!

We’ve all been on active duty between 1957 and 2001 or know someone who has.

Passing on good information for all you military folks when you apply for social security. I know this may be too early for some of you to think about social security but, keep living and you will get there.

And now my “two cents”:

The folks who pass this sort of information along are just trying to be helpful. But sometimes things like this can worry people about things that they really do not need to be worrying about. I’m sure there are many other things to focus your worries upon if you are so inclined.

Here was my response to the individuals who forwarded the message to me:

Thank you for sharing this information.

I spend every day trying to find ways for folks who have served my country (both military & federal civilians) to maximize the benefits that they have earned. But I wouldn’t get too worked up over this “warning letter” that you have come across.

#1. According to the Social Security Administration, this $1,200 credit has already been added for those who served in the military between 1968 and 2001. It should already be reflected in their Personal Earnings and Benefits Estimate Statement (PEBES). There should not be a need for these individuals to provide a copy of their DD214 when applying for Social Security benefits.

#2. Folks who served between 1957 and 1967 will want to bring their DD214 when they apply for Social Security benefits, but it is one of the requested documents that Social Security asks for when an individual applies for Social Security. In other words, it is part of the application process, and contrary to this “warning letter”, Social Security will ask for it during the adjudication of the benefit.

In either situation, it can’t hurt you to bring your DD214 when you apply for Social Security benefits, but the only ones who should need it are the folks who served before 1968.

#3. To compute your benefit, Social Security uses the 35 years whenever you earned the most amount of income. For many folks who served prior to 1968, their highest 35 years will come from later years of income which means that some of those early years won’t even be used in the computation of their benefit anyway.

This same sort of situation might be applicable to someone like me who served for 10 years right out of high school between the ages of 17 and 27. Although I plan to work beyond the age of 62, I will have 35 years of making higher income (outside my military career) by the time I reach the age of 62. Since my military service was performed between 1986 and 1996, my PEBES already reflects the $1,200 per year credit. But it is likely that none of those years will be used in the computation of my benefit anyways.

#4. I ran a few “real world” examples, with and without the additional $1,200 per year credit, and I have found that the differences are not as substantial as this “warning letter” would like you to think.

Here are some examples:

Age 62 in 2014

Work income since 1970

10 years of military service from 1970 to 1980

Retiring at age 62 earning $84,000/year

Benefit at age 62 without the extra $1,200 credit: $1,718/month

Benefit at age 62 with the extra $1,200 credit: $1,719/month

Benefit at age 66 without the extra $1,200 credit: $2,278/month

Benefit at age 66 with the extra $1,200 credit: $2,279/month

In the situation above, most of this worker’s benefit was based on work performed after he left the military so the extra $1,200 credit didn’t make much difference at all. Let’s look at another situation where the individual has more military service:

Age 62 in 2014

Work income since 1970

20 years of military service from 1970 to 1990

Retiring at age 62 earning $84,000/year

Benefit at age 62 without the extra $1,200 credit: $1,718/month

Benefit at age 62 with the extra $1,200 credit: $1,723/month

Benefit at age 66 without the extra $1,200 credit: $2,278/month

Benefit at age 66 with the extra $1,200 credit: $2,285/month

And one last situation where the individual has 30 years of military service:

Age 62 in 2014

Work income since 1970

30 years of military service from 1970 to 2000

Retiring at age 62 earning $84,000/year

Benefit at age 62 without the extra $1,200 credit: $1,718/month

Benefit at age 62 with the extra $1,200 credit: $1,727/month

Benefit at age 66 without the extra $1,200 credit: $2,278/month

Benefit at age 66 with the extra $1,200 credit: $2,290/month

You always have to be cautious with what you read online… especially if it comes from an unknown source… or from someone who does not understand how benefits are computed.

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James Marshall is a proven subject matter expert in the areas related to federal retirement benefits. Because of his attention to detail and sincere desire to provide the best, most personal service, James has been the “go to” retirement counselor at every agency he has worked with.

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As a military veteran, I have a strong sense of commitment to those who have served our country. It's my opinion that the federal community not only deserves accurate information, but they also deserve the best personal service due to their service and commitment to America's civilian government.